Overcoming the Board’s Basic Dilemma

The challenge facing board members in serving their organization is finding the middle ground between micro-management (too much control) and blind trust (not enough control). Why is this issue so important?

Most boards aren’t in control. Why? Several reasons may be at play:

• they aren’t directly involved in operations
• they may not meet often enough
• they rely on management for information that is not forthcoming or isn’t accurate

Can the dilemma be overcome? To some degree, no. But it can be managed. In any case, the board needs to choose which risk to take in the board’s control of the organization: to slow the organization through micromanagement or to go beyond their comfort zone and trust management.

Key Areas to Make Improvements

The following will help to lessen the dilemma:

1. Urge the board to participate in an ongoing education or training program. Take a short amount of time at each meeting to study governance itself or to have a presentation from management on one aspect of the organization’s operations.
2. Stop focusing on the past. Most boards spend 60 to 80 percent of their time hearing or reviewing what has already occurred, i.e., financial and staff reports and the like. If that is true for you, you’re not spending enough time on making the future different from the past. Do learn from the past, but use that knowledge to create a brighter future. One way to do that is to insist on reviewing all reports before the meeting and then adopting them via a consent agenda. Past dealt with.
3. Strengthen your strategic planning process and the board’s role in it. This is the principal means for you to get control of and direct the future.
4. Review vital statistics or metrics of the organization, specifically looking at trends, to learn what the key causes of success and failure are.
5. Devote more of your meeting time and energy to matters of policy: the status of your strategic plan, authorities of the CEO, data requirements, customer and competitor evaluations, the criteria for new investment and evaluation of existing ones, and the like.

Your contribution and added value to the organization increases as you focus on the above. Determine the amount of time you are spending on these vital activities and make changes to improve.

Questions or thoughts? Email us to start the conversation.